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28
Mar

Seminar – Stochastic capacity investment in the presence of production resources

12:30 - 14:00

Onur Boyabatli, Associate Professor, Lee Kong Chian School of Business, Singapore Management University

In practice, manufacturing firms face a number of uncertainties while choosing their capacity investment levels. Besides the uncertainty in product demand, capacity investment may also be subject to uncertainty in the availability of production resources (used together with the capacity invested) and these resources may become constraining in the production stage. The production resource can be a financial resource such as operating budget, and its shortage can be attributed to the worsened external financing conditions (eg, 2008 financial crisis). The production resource can also be a physical resource such as a component and its shortage can be attributed to a variety of factors including health and safety issues in supplier’s premises (eg, COVID-19 pandemic) and industry-wide shortage (eg, shortage in semiconductor components in the automotive industry). Motivated by these observations, this paper studies a manufacturing firm’s capacity investment decision under demand and production resource uncertainties. To this end, we consider a firm who produces and sells a single product in a single selling season to maximise its expected profit. We formulate a two-stage stochastic model. In the first stage, the firm chooses the capacity investment level in the presence of demand and production resource uncertainties. In the second stage, after both uncertainties are realised, the firm then decides on the optimal production quantity constrained by the available capacity and production resource. We conduct sensitivity analyses to examine the impact of production resource variability and its correlation with demand. We find that the firm always benefits from a higher correlation. For the effect of production resource variability, we identify the critical roles played by the correlation and the capacity investment cost. In particular, we find that the firm benefits from a lower production resource variability when the capacity investment cost is sufficiently high or the correlation is sufficiently low. In other cases, the firm benefits from a lower production resource variability only when this variability is sufficiently high; otherwise a higher production resource variability increases profitability. These results have important managerial implications on how a local versus global supply chain disruption affects the firm where correlation is weak (or zero) for the former and it is large in absolute value for the latter. (more…)



28
Mar

MBA fair – The MBA Tour Europe, online

18:00 - 20:30

Join the Cambridge MBA Admissions team and make a lasting impression with admissions decision-makers and find your right-fit school during small group meetups.

During the 25-minute, face-to-face video sessions, you can ask questions and get a better feel for the programme and if it’s right for you. You’ll also have the opportunity to visit our booth to gather more information about the Cambridge MBA and interact with our team.
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30
Mar

Seminar – The effect of voting structure on new product evaluation decisions: Advisory committees at the FDA

12:30 - 14:00

Panos Markou, Assistant Professor, UVA Darden School of Business

How should an expert committee vote to reach a collective recommendation on a complex problem? We examine how sequential versus simultaneous voting schemes shape information gathering, discussion and deliveration, voting patterns, and ultimately the decision quality of a committee’s recommendation. Combining multiple data sets based on US Food and Drug Administration (FDA) Advisory Committees’ evaluations of new drugs and medical devices, we leverage a 2007 change from sequential to simultaneous voting to establish three key insights. We show that, relative to a sequential voting protocol, the adoption of a simultaneous voting mechanism by FDA Advisory Committees led to (1) an increase in the breadth of information deliberated by the committee and a change in the linguistic characteristics used by members during discussions, (2) a reduction in unanimous voting outcomes, and (3) a reduction in the risk of an approved drug being withdrawn from the market (ie, an increase in decision quality). This suggests that simple changes in committee protocols can have large impacts on information-gathering and decision-making. (more…)



31
Mar

Social Venture Weekend

31 Mar 08:30 - 18:30 | 1 Apr 08:00 - 16:00

Kick-start your social venture at Social Venture Weekend

The Social Venture Weekend at Cambridge Judge Business School is for anyone with an ambition to set up or grow a business that makes a positive social or environmental impact across all sectors, from employment to genomics, ageing to energy.

The workshop is an inspiring introduction to the social venture sector and a valuable opportunity to focus intensely on your own business. In an inclusive, supportive, and friendly atmosphere, you’ll have the opportunity to share and test your ideas with others and learn from the experience of successful social entrepreneurs.

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